// Laura Ashley losses increase in tough year
// The loss before tax hit £4m in 2019, up from £1.5m the year before
// Sales were at £109.6m, which was a decrease of almost 11%
Laura Ashley’s losses have widened in a “challenging” year amid growing concerns about its finances.
In the 26 weeks to December 31, losses before tax ballooned by 166 per cent to £4 million due to lower home furnishings sales and Brexit uncertainty.
The fashion and lifestyle retailer said disruption caused by the change in its Japanese franchise partner to Itochu Corporation also had an impact.
Total group sales fell by 10.8 per cent to £109.6 million, compared to the same period in 2018.
The decline in total revenue was due to the closure of three stores and weaker consumer confidence – with like-for-like retail sales dropping by 10.4 per cent.
Total UK retail sales for the period were down by 10 per cent to £106.5 million and on a like-for-like basis UK retail sales fell by 10.4 per cent.
Total online sales fell 15.5 per cent to £22.2 million.
The retailer secured a £20 million loan yesterday to fund its daily operations, which saw its shares rise.
The loan came from Wells Fargo after the retailer confirmed it was in talks with the lender.
Laura Ashley revealed the talks after reports appeared in the press over the weekend, but on Monday it denied claims that MUI Asia would put money into the business to help it stay afloat.
It had been unable to access some of the funds after restrictions on the £20 million loan arrangement kicked in.
The retailer’s shares clawed back some of the losses they had racked up earlier in the week, at one point rising by 0.35p to 2p, a 21 per cent increase.
However, it is still well below the company’s closing price of 3.25p on Friday, before the talks were revealed.
Regarding its losses, Laura Ashley said: “There have been market challenges for our business which have impacted these results during the current financial year.
“The decline in total revenue was due to the market headwinds and weaker consumer spending during the period, which led to a decline in sales of bigger ticket items.”
“Whilst these results are disappointing, we believe that with the right focus and support, Laura Ashley has a strong future and can be successful again.
“In the autumn of 2019, we carried out a strategic review of the business to set the future direction of the company and return Laura Ashley to the great British brand that is known and cherished around the world.
“This includes reconnecting with our traditional values and our strong British heritage.”
with PA Wires